What Businesses Could Be Successful Franchises in 2022 and Beyond?
Is Your Small Business a Candidate for Franchising?
To look at any industry or business in 2022 and consider the future, it is nearly impossible to avoid over-laying the pandemic screen. That’s not a “bad thing.”
In the last 24 months, many businesses – franchise brands and non-franchise brands – learned to pivot and re-tool, re-invent or adjust their business models. Businesses in certain industries became branded by our government as “essential” and many entrepreneurs learned that to pivot and think outside the box is an essential skill that they need to exercise continuously; not a one and done activity.
Labeled an “essential” business became a badge of honor of sorts and to some, a very appealing marketing term, synonymous with growth and return on investment. In fact, many franchise brands such as cleaning services, saw significant growth during this time.
Do you have a business that fared well during the pandemic because you were able to monitor and shift and pivot? Maybe you have a business model that could become a franchise.
We’ll take a look at the industries that are performing well as franchises and are expected to continue that trend, but first, let’s glean some information from relevant franchise statistics.
Statistics - Franchise Industry 2022
- The top two franchise industries that are outperforming the others in 2022 are personal care and travel. Projections show that personal care is growing at a rate of 111% while travel is showing a growth rate between 214-318%. Their market share eclipses all other franchise industries combined, and they are expected to grow at rates of over 100% and 200%, respectively according to Linchpin.
- Among the top 10 most profitable franchises, seven are food businesses.
- According to a market research firm Datassential, consumers will spend $771 billion in restaurants in 2022. This shows an increase from the $608 billion spent in 2020 and the $701.4 billion spent in 2021.
- McDonald’s is still the top aggregate franchise business in the world and one of the most expensive. According to Investopedia, McDonald’s Corporation has around 38,000 restaurants in 100 countries and 93% of them are franchise stores. Franchisee applicants must have a minimum of $500,000 available in liquid assets and must pay a $45,000 franchise fee. If you are looking to launch a new McDonald’s franchise you can expect to pay between $1,314,500-$2,306,500..
- Subway, though less profitable, has more franchise units than anybody else at about 41,000 worldwide.
- The average cost to launch and maintain a franchise ranges between $50,000 and $100,000. Some franchises launch for as low as $10,000.
- According to a 5-year study by FranNet, 92% of their franchise placements were still in business after 2 years and 85% were still in business after 5 years. One point to underscore is how important a franchise consultant can be when it comes to researching and finding the right franchise opportunity. The better the match, the greater likelihood of a long partnership between franchisor and franchisee.
Now, let’s look at the industries that are performing well as franchises and are expected to continue that trend. Is your business in one of these sectors? If so, you may have a model that will thrive as an emerging franchise in one of these spaces.
Franchise Industries Outperforming
We’re learning that restaurants can survive pandemic-related impediments IF they adopt a wheels-based approach. They must deliver if they are to survive in many places. The upside to this is that less pressure on the brick-and-mortar functions means overhead costs are declining. Therefore, franchise restaurants are still highly lucrative – although it depends on the model.
Health products is a booming sector as Americans continue to focus on their health. This is a very broad franchise category, and includes spas, gyms and wellness facilities, as well as vitamin distributors, mobility devices, and more.
There was a tremendous demand for home-schooling resources since the start of the pandemic. Popular franchise opportunities in this sector include businesses that create and deliver learning aids and various preparatory materials for students and parents.. Franchises in this sector are expected to continue to see steady growth. Bear in mind, this sector is broad and ranges from martial-arts training to computer programming boot camps.
The pace of change in technology has created a range of incredible opportunities and a variety of markets for entrepreneurs from digital marketing to the sales, service and repair of electronics. If you have a successful tech business, compare your model to existing tech-oriented franchises. Do you bring something to the market that’s different or better? Can you scale your operation and create a franchise in this space?
- Green Supply Lines
This includes both franchises dedicated to sustainable energy along with non-green companies wishing to save money and become more efficient with greener methods. There is an enormous market for green-friendly products, and we continue to see more franchise options all the time.
- Pandemic Safety
Again, this may not be your exclusive focus as a franchise. It’s more of a strategy for making the business sustainable. You won’t last long as a business if you can’t provide pandemic protection. Americans are seeking to escape quarantine frustration for places that they can still work remotely. The travel industry is coming back strong, even spinning off a new work trend, 'bleisure' as well as sparking new interest from a younger demographic in camping or RVing.
- Home Renovation
If your renovation company franchise adheres to pandemic-safe service, you’ll have a lot of opportunity in this market. One reason is the recent home-price surge. Many are struggling to buy homes and are choosing to renovate their current ones.
While the pandemic virtually shut down domestic and international travel, there are reports that the industry is set to come back as restrictions are lifted. In fact, the World Travel & Tourism Council projects the Travel & Tourism industry could grow to $8.6 Trillion in 2022.
There are opportunities in the travel franchise sector that range from travel agencies to luxury cruise franchises and there are models that are geared to serve people at a variety of income levels. On average, consumers spend about 5% of their income annually (approximately $2,400) to plan and book their vacations. Of course, many people spend a great deal more.
If you are looking for another option, you might consider the hotel industry. Most American hotels are franchises and you might find that household name brands, while pricey, are more accessible than you think.
The franchise world is filled with opportunities and FranchiseYourBusiness.com is a global resource center for business owners who want to leverage the power of franchising to expand their brand. Consider reaching out to one of the Strategic Advisors today for a free, no-obligation consultation.